New Delhi. The Supreme Court has given an important decision in favor of home buyers. The Supreme Court has said that if a real estate company is unable to repay the money of the banks and becomes a defaulter, then the people buying the house in the project (homebuyers) should be given priority and not the bank. This decision of the Supreme Court will benefit many such people who have not been given possession of the house by the builder and have also become a defaulter from the bank.
The Supreme Court upheld the decision of the Rajasthan High Court in which the High Court had said that if a real estate company defaults and the bank takes possession of the property as a secured creditor, then the builder or promoter can make a complaint to RERA. It is worth noting that when a real estate company is not able to repay the loan of the bank, then the bank has many ways to recover its loan, most of all those people who have bought a house in the project have no way to get their money back. And they have not even got possession of the house yet. Such people will be greatly benefited by the decision of the Supreme Court.
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No priority in liquidation
The government has made home buyers a part of the Committee of Creditors in the Insolvency and Bankruptcy Code. The committee of creditors decides about the future of the defaulted company. However, in the matter of liquidation, homebuyers have not got priority. Due to this, everything was looted when the builder defaulted. After the decision of the Supreme Court, now home buyers have got preference in liquidation as well.
this was the case
Union Bank of India had challenged the decision of the Rajasthan High Court, in which the High Court had held that if a real estate company defaults and the bank takes possession of the property as a secured creditor, then the builder or promoter can complain to RERA. could. Union Bank of India says that banks do not come under the purview of the RERA Act, as they are not its promoters. In such a situation, if the bank recovers the loan, then RERA has no right to interfere.
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The Supreme Court ruled that home buyers should get priority when the real estate company defaults on the loan. The Supreme Court said that there are frequent conflicts in the recovery procedures under the Real Estate (Regulation and Development Act) and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act. Preference should be given to Real Estate Act.
Tags: real estate, Supreme Court
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